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Crop Insurance. Consider a state in which farmers are divided equally into two? types: high risk and low risk. The average annual crop loss? (and possible insurance? claim) is ?$300 for a? low-risk farmer and ?$1 comma 1,400 for a? high-risk farmer.
a. If all farmers were to buy? insurance, what is the? break-even price for the insurance? company? ?$
nothing
?(Enter your response rounded to the nearest whole? number.)
b. Suppose a farmer will purchase insurance only if the price? (the annual? premium) is no more than ?50% higher than his or her average crop loss. What is the equilibrium? price? ?$
Illustrate what relationship must hold between x and p so that A second order stochastically dominates B.
The short-run and long-run effects of this change for the levels of per-capita output, and the growth rates of (total) output and per-capita output.
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Which policy in the box below would be one that a Keynesian economist might suggest to the government in order to help the economy reach full employment? Show the effects in the graph below if the economy successfully reaches full employment.
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ABC Company currently does not have any debt. Its earnings before interest and taxes (EBIT) are $500,000, and it is a zero-growth company. The firm's tax rate is 40%. What is the firms cost of equity?
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Your company is bidding on a system design project. It is your job to design the system architecture. How will you balance the need for scalability against the need to keep costs as low as possible to win the bid?
Suppose General Motors is trying to hire a small firm to manufacture the door handles for Buick sedans. The task requires an investment in expensive capital equipment that cannot be used for any other purpose. Why might the president of the small fi..
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Hurricane Katrina damaged a large number of oil refineries in the Gulf Coast, causing a large increase in crude oil prices (crude oil is a key input in producing gasoline). After the hurricane came, all consumers expected that the gasoline price woul..
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